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Global Fund suspends contracts in Cambodia

By JOHN HEILPRIN Associated Press

Posted:
11/15/2013 10:12:16 AM CST

Updated:
11/15/2013 11:18:47 AM CST

GENEVA—Two suppliers of mosquito nets said Friday they are working to improve financial controls after their contracts in Cambodia were suspended by a $24 billion health fund that uncovered evidence of bribery.

The two suppliers, Vestergaard Frandsen of Switzerland and Sumitomo Chemical Singapore, said in separate statements they were working to correct problems that they attributed to employee misconduct.

In a statement, Sumitomo Chemical Singapore said it "takes a serious stand against employee misconduct of any kind and has taken appropriate remedial measures."

Vestergaard said in a company statement the improper activity by two employees in Vestergaard Frandsen India "was not known or approved by our management in Switzerland," which it said is committed to the highest ethical and business practices.

"Nonetheless, Vestergaard is ultimately responsible for the company and actions in any of its subsidiaries," it said. "We have implemented corrective actions that include improved controls and procedures in all our operations."

The companies were reacting to an investigation report published Thursday by the inspector general's office of the Global Fund to Fight AIDS, Tuberculosis and Malaria, which said the fund uncovered "serious financial wrongdoing in Cambodia."

The Geneva-based fund, which has committed aid to 151 countries since its creation in 2002, said that between 2006 and 2011 the two mosquito net suppliers paid two Cambodian officials about $410,000 to gain contracts for insecticide-treated nets that prevent the spread of malaria.

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Both companies cooperated with the fund's investigation, which began in 2011, the fund said, and each of the companies took action against the employees involved.

The fund said in a statement that even though a grant in Cambodia "was compromised by the commission payments, all the mosquito nets procured by that grant were provided as intended."